I would appreciate some advice, please.
I am 34 years old, married, 3 young kids (under 6). Wife currently not working but will return to work part time in September, 3 days a week - in child care (so money is not great).
Having said that, I am lucky and on a high income. We were able to pay off our first home loan (2005 - 500k) in 6 years, and our current home loan (bought in 2013) of 1.1m we have already paid off around 500k. We are good savers and able to manage money well, I think.
We have paid off 500k by putting it into an offset account.
Now, we are thinking of buying our first IP. Reasons for buying:
- Long term capital growth
- Tax minimization
- Alternate source of income
A few people I have spoken to that I trust have suggested either Macquarie Park or Parramatta - both because of their closeness to transport, and Macquarie Park due to proximity to Macquarie Uni - lots of international students looking for accommodation. Both have low vacancy rates as far as I can tell.
We can afford to borrow around 800k, I think. We could then pull another 200k out of our offset account, giving us the ability to play with around $1m, which would be easily sufficient to buy a 2 bedroom, 1 garage newish (or brand new) apartment in either location.
Both areas have a rental income of around 500pw.
By my calcs, this effectively would cost me around $200/month in cash flow, PLUS the extra interest we would be paying on our home loan by withdrawing 200k from the offset. These numbers don't worry me and I am confident we could manage it.
Questions:
1) Is now a good time to buy? it seems we are at the peak of the market - but then again, I figure we have to get in 'at some time'
2) What other areas in Sydney should we consider? Are there areas with higher rental yield than these 2 areas?
3) Anything I am not considering here?
Thanks - greatly appreciate any advice you can offer.
I am 34 years old, married, 3 young kids (under 6). Wife currently not working but will return to work part time in September, 3 days a week - in child care (so money is not great).
Having said that, I am lucky and on a high income. We were able to pay off our first home loan (2005 - 500k) in 6 years, and our current home loan (bought in 2013) of 1.1m we have already paid off around 500k. We are good savers and able to manage money well, I think.
We have paid off 500k by putting it into an offset account.
Now, we are thinking of buying our first IP. Reasons for buying:
- Long term capital growth
- Tax minimization
- Alternate source of income
A few people I have spoken to that I trust have suggested either Macquarie Park or Parramatta - both because of their closeness to transport, and Macquarie Park due to proximity to Macquarie Uni - lots of international students looking for accommodation. Both have low vacancy rates as far as I can tell.
We can afford to borrow around 800k, I think. We could then pull another 200k out of our offset account, giving us the ability to play with around $1m, which would be easily sufficient to buy a 2 bedroom, 1 garage newish (or brand new) apartment in either location.
Both areas have a rental income of around 500pw.
By my calcs, this effectively would cost me around $200/month in cash flow, PLUS the extra interest we would be paying on our home loan by withdrawing 200k from the offset. These numbers don't worry me and I am confident we could manage it.
Questions:
1) Is now a good time to buy? it seems we are at the peak of the market - but then again, I figure we have to get in 'at some time'
2) What other areas in Sydney should we consider? Are there areas with higher rental yield than these 2 areas?
3) Anything I am not considering here?
Thanks - greatly appreciate any advice you can offer.